An employee at the privately-owned Fibertec Environmental Services prepares materials in the company’s wet chemistry lab, which is used in the analysis of industrial discharge. Equipment can cost a lab hundreds of thousands of dollars.

There is a credible public policy argument that certain functions of environmental protection should be performed by the government. These functions, however, do not include laboratory analysis. It would probably be a surprise to most taxpayers to learn that the state of Michigan operates an environmental laboratory at their expense, when the same lab services are readily available in private laboratories.

In fact, the Michigan Department of Environmental Quality laboratory operates at a considerable cost to taxpayers. For fiscal 2001, the MDEQ laboratory had a budget of more than $6 million, involving 69 authorized employees. Approximately $3.1 million of this budget comes from general taxes; $500,000, from federal funds (most of which could be used for other environmental protection purposes); and $2.5 million from fees paid by
local governments and from settlement funds (which could likewise be used for other purposes).

No one disputes that the MDEQ laboratory does high quality work. Independent tests give the state environmental lab quality ratings of between 95 percent and 100 percent.

Nevertheless, this work should not be performed by state employees. Private companies are willing and able to provide the same services, and rather than simply consuming taxpayers’ dollars, they will actually pay taxes to state government on the income they earn.

Ironically, Michigan claims to be encouraging private-sector growth in high-technology areas like environmental laboratories. Sadly, the MDEQ lab is inhibiting this growth by commandeering work that private labs could perform. True, the MDEQ does contract some work to private laboratories, but only to four or five.

In contrast, the Michigan Environmental Laboratory Association is comprised of approximately 30 large environmental laboratories. Each is qualified to do environmental laboratory analysis. Matt Frisch, president
of Fibertec Environmental Services and a member of the association, said: “I would very much like to have an opportunity to continue to compete for work on cleanup projects. However, the MDEQ has directed the work to its own lab, or one of its contract labs. I believe, as do most laboratory owners, a regulatory agency should not be competing with the regulated community.”

The MDEQ maintains that accurate results of environmental testing are so critical that only the state can be trusted to do the work. The state points to investigations conducted 10 years ago that indicated problems
with the quality of work done by some environmental laboratories. To draw broad conclusions, however, from such a small sample ignores the quality of many private laboratories.

The Michigan Legislature has proposed a complex and costly accreditation program to certify additional private labs for MDEQ contract work, yet accreditation programs seldom deliver what they promise, since
they are expensive to administer and inevitably lead to more government bureaucracy. There is little indication that an environmental laboratory accreditation program would result in any appreciable improvement in
the quality of laboratory analysis from private laboratories.

To their credit, many state legislators have recognized this, and over the objection of the MDEQ, have backed away from that approach. The Legislature is now considering a less onerous proposal that provides the MDEQ an assurance of quality data from private laboratories without a costly accreditation apparatus. After all, new laws are not needed to ensure quality; criminal sanctions already exist for intentionally falsifying laboratory data. And any negligence in the operation of environmental laboratories can be easily handled by enforcing contracts and by carefully awarding work to firms with good track records.

It is time for the state of Michigan to get out of the environmental laboratory business. Government agencies should not be using taxpayer dollars to compete with Michigan businesses when these businesses can provide the same services reliably and efficiently. As long as the state operates an environmental laboratory, state employees will be threatened by work that is contracted to Michigan businesses.

It is ironic that the state is willing to spend large sums of money — grants for “Cool Cities” and targeted subsidies — to spur private-sector job creation, but is unwilling to stop spending tax dollars for an unnecessary state-owned lab that is thwarting growth in private sector jobs. Many private laboratories would stand in line to bid on auctioned state laboratory equipment. The money generated from the sale could be used to help reduce the state budget deficit without raising taxes.

Russ Harding is senior environmental policy analyst with the Mackinac Center for Public Policy.